CPI for March Prints Cooler than Expected but Before Tariff Upheaval

The consumer price index rose 2.4% year-over-year in March, per data released Thursday by the Bureau of Labor Statistics. Economists had forecasted a 2.6% annual increase, a modest slowdown from February’s 2.8%. On a monthly basis, headline inflation edged up 0.1% in March, aligning with economists’ predictions of a 0.1% rise, down from February’s 0.2% pace.

Core CPI rose 0.1% month-over-month compared with a 0.3% consensus and 0.2% in February. Year-over-year was 2.8%, the lowest since 2021, compared with 3.0% consensus and 3.1% the prior month.

U.S. inflation appeared to be moderating in early 2025, yet new tariffs and policy uncertainty are stoking fresh concerns. Typically, a dip in year-over-year price growth would be a positive signal. However, the March data presents a challenge for investors, policymakers, and businesses to interpret with confidence given tariffs have not figured into the data yet.

While March CPI data reinforces a cooling pattern, markets are adjusting to the potential inflationary impact of broad trade policies and the Federal Reserve’s possible reaction.